In 50 years of covering financial fraud, I have found few people as repugnant as Jordan Belfort, who is portrayed by Leonardo DiCaprio in the current movie The Wolf of Wall Street.
Jordan Belfort is a convicted stock swindler. So is Amr (Tony) Elgindy, who late last year returned to live in San Diego County (he won’t say exactly where) after a long stretch in prison. When I talked with him, he seemed depressed — not unusual because he has had severe problems with bipolar disorder.
Tony Elgindy exposed Jordan Belfort’s scams but ended up afoul of the law for market manipulation and racketeering.
But the ebullient Belfort gets big bucks as a motivational speaker, has written two successful books — The Wolf of Wall Street and Catching the Wolf of Wall Street — and is being portrayed by Hollywood star Leonardo DiCaprio in Martin Scorsese’s movie The Wolf of Wall Street. It came out Christmas day.
But financial fraud experts tell me Belfort was never known as the Wolf of Wall Street while his scams were going strong in the 1990s, and his firm was on Long Island, not Wall Street. An earlier movie, The Wolf of Wall Street, came out in 1929 (months before the big crash of that year).
Martin Scorsese directed The Wolf of Wall Street.
I read both books, supposedly autobiographical, allegedly written by Belfort. In 50 years of covering financial fraud, I have found few people as repugnant as Belfort. In a rehab session, he introduces himself: “Hi, my name is Jordan, and I’m an alcoholic, a Quaalude addict, and a cocaine addict. I’m also addicted to Xanax and Valium and morphine and Klonopin and GHB and marijuana and Percocet and mescaline and just about everything else, including high-priced hookers, medium-priced hookers, and an occasional streetwalker.”
Yet, throughout the book, he talks about how much he loves his wife (his second, and they have since divorced) and his children, even though he romped with prostitutes in Switzerland while illegally stashing money in that tax haven, crashed a helicopter and sank an expensive yacht while high on drugs, drove his car through the garage with his daughter in the front seat, and shoved his wife down a flight of stairs. The government said he stole $200 million but only asked him to pay back $110 million. He has not done so, according to the Brooklyn United States attorney’s office.
The movie is said to be true to the book, with more than 500 uses of the word “fuck.” I refuse to see it, not because of the endless profanity, but because DiCaprio is playing the role of a self-professed scumbag who is clearly proud of his thefts.
Gary Weiss wrote a series of stories in the 1990s exposing the practices of stock-market boiler rooms.
Back in the late 1990s, Elgindy was one who helped blow Belfort’s vile stock-market scams out in the open. By tape-recording phone calls with Belfort, Elgindy could show that Belfort, who had been banned from the stock-brokerage business, was still swindling innocent victims — in fact, had a concealed interest in a brokerage Elgindy ran. The tapes were provided to the Federal Bureau of Investigation and to Gary Weiss of Business Week (now Bloomberg Businessweek), who wrote a blockbuster series in the late 1990s about stock-market boiler rooms and the junk they foisted on naive people and how the whole rancid business was heavily infiltrated by the Mafia.
To the best of his recollection, Elgindy believes he was betting that Belfort’s garbage stocks would go down while Belfort’s maggoty salespeople were trying to talk them up.
Belfort cofounded and ran perhaps the slimiest of the boiler rooms that dumped worthless penny stocks on naifs through high-pressure sales. Its name was Stratton Oakmont. (The names of many such pump-and-dump brokerages read like a list of British royalty — Monroe Parker, Hanover Sterling, Armstrong McKinley, ad nauseam.) In his halcyon days, Belfort was raking in $50 million a year. As Weiss pointed out, in 1994 Stratton agreed to pay Belfort $180 million if he would not compete with his firm, which he was leaving. The deal was signed one week before Belfort was banned from the securities business. Hmmm...
The ban didn’t stop him, as Elgindy’s tape recordings revealed. Finally, Belfort pleaded guilty to multiple securities violations, along with money laundering. But, astonishingly, his punishment was a mere 22 months in prison. The reason? In a perversion of normal procedure, he ratted on people who worked for him. It should be the other way around. “All his rat credits were high,” cracks Weiss, whose book, Born to Steal: When the Mafia Hit Wall Street, is considered the Bible on boiler-room stock-market scams.
Elgindy’s associates ratted on him.
As a young man, he worked for smelly brokerages and pushed Belfort-like junk. He admits being a scumbag. But then he switched to sniffing out stocks that were overpriced or fraudulent in some way. He would short those stocks (bet that they would go down) and also post his negative comments in chat rooms and on his own website. People paid big bucks for Elgindy’s opinions; he raked in so much that he bought a multimillion-dollar home in Encinitas. Elgindy shared his reports with government investigators.
But in a New York trial, he was convicted of a racketeering conspiracy. A Federal Bureau of Investigation agent stole confidential information about companies that were under government investigation and fed the facts to Elgindy in return for promises of cash and future employment. Elgindy used the information to short stocks for profit and spread the dirt over the internet in attempts to manipulate the stocks. Also, said the federal government, Elgindy tried extortion on some companies by threatening to spread the bad news unless he was given discounted shares.
A government prosecutor suggested that Elgindy, of Egyptian descent, tried to dump stocks in advance of 9/11 and perhaps had inside information on the attack. But there was no proof of that, and the judge tried in vain to keep such suggestions away from the jury. In his appeal, Elgindy argued unsuccessfully that the jury had been tainted.
He got 11 years in prison, including 2 for lying to federal officials when he tried to fly to San Diego under a phony name, with $25,000 in cash, $30,000 to $40,000 in jewelry, and prescription narcotics. He did this during a pretrial period when he was not allowed to travel.
The former FBI agent got six years. Elgindy says his prison stays in Manhattan, Brooklyn, and Terminal Island were “brutal.” The government said he had to pay back $1.5 million. Compare that to Belfort’s $110 million. If Elgindy deserved 11 years, Belfort should have gotten 22 years, and there would have been no motivational speeches and no Scorsese/DiCaprio movie.